Consumer Credit InfoConsumer Credit Info

Ms. Mary RobertsMs. Mary Roberts

Clarke County High SchoolClarke County High School

Family and Consumer Sciences Dept.Family and Consumer Sciences Dept.

Concept of Credit is OldConcept of Credit is Old

• Credit legislation dates back to 1800 Credit legislation dates back to 1800 BCBC

• Records show that the king of Records show that the king of ancient Babylonia decreed that all ancient Babylonia decreed that all loans had to be accompanied by a loans had to be accompanied by a written contract setting forth the written contract setting forth the terms of the loan.terms of the loan.

Where did money come Where did money come from? from?

• Did it come from the sky?????Did it come from the sky?????

Evolution of MoneyEvolution of Money

• Prehistory – agricultural productsPrehistory – agricultural products• 700 BC Gold Coins700 BC Gold Coins• 1661 Modern paper money 1661 Modern paper money • 1700 Checks and bank drafts1700 Checks and bank drafts• 1916 The concept of installment loans was 1916 The concept of installment loans was

bornborn• 1959 Credit cards first came on the scene1959 Credit cards first came on the scene• 1988 ATMs1988 ATMs• 1991 Debit Cards1991 Debit Cards• 1996 Chip Cards – Smart Cards1996 Chip Cards – Smart Cards

Consumer Credit is Relatively Consumer Credit is Relatively NewNew

• Consumer credit is a relatively new Consumer credit is a relatively new concept.concept.

• It has been within the past 50 years It has been within the past 50 years that use of credit to buy clothing, that use of credit to buy clothing, food, furnishing and transportation food, furnishing and transportation as we know it today, has been as we know it today, has been acceptable. acceptable.

What is Consumer Credit?What is Consumer Credit?

• Credit is using tomorrow’s money Credit is using tomorrow’s money today!today!

• When we use credit we discount the When we use credit we discount the future.future.

• Credit is an arrangement to receive Credit is an arrangement to receive cash, goods or services now, and pay cash, goods or services now, and pay for them in the future.for them in the future.

Protecting Yourself Against Protecting Yourself Against Credit Card FraudCredit Card Fraud

• Sign new cards as soon as they arrive.Sign new cards as soon as they arrive.

• Treat the cards like money – keep Treat the cards like money – keep them secure.them secure.

• Shred anything with your account Shred anything with your account number on it.number on it.

• Don’t give your number over the Don’t give your number over the phone unless you initiate the call.phone unless you initiate the call.

Protecting Yourself Against Protecting Yourself Against Credit Card FraudCredit Card Fraud

• Get your card and a receipt after Get your card and a receipt after every transaction and compare them every transaction and compare them to your bills when they arrive.to your bills when they arrive.

• Check your statements for errors.Check your statements for errors.

• Notify issuer if you don’t get your Notify issuer if you don’t get your billing statement.billing statement.

• Check your credit report every year.Check your credit report every year.

Fair Credit Reporting ActFair Credit Reporting Act

• Is your credit report accurate?Is your credit report accurate?– If you are denied credit based on your If you are denied credit based on your

report, you can get a copy of your credit report, you can get a copy of your credit report free within 60 days of your report free within 60 days of your request.request.

– Inaccurate information must be corrected Inaccurate information must be corrected within 30 days.within 30 days.

– Only authorized persons have access to Only authorized persons have access to your report.your report.

– Adverse data can be reported for 7 years Adverse data can be reported for 7 years and bankruptcy for 10 years.and bankruptcy for 10 years.

What if You are Denied What if You are Denied Credit?Credit?

• Ask the creditor to clarify the specific Ask the creditor to clarify the specific reason for denial of credit.reason for denial of credit.

• Check your credit report file.Check your credit report file.

• Apply to another creditor with Apply to another creditor with different standards.different standards.

• Take steps to improve your credit Take steps to improve your credit worthiness.worthiness.

If You Are Denied CreditIf You Are Denied Credit

• You have the right to provide a 100 You have the right to provide a 100 word explanation in your file.word explanation in your file.– For example, you could explain if you For example, you could explain if you

were out of work due to an extended were out of work due to an extended illness and were therefore late paying illness and were therefore late paying bills for a time.bills for a time.

• Seek help if you think there is Seek help if you think there is discrimination.discrimination.

Avoiding and Correcting Avoiding and Correcting Credit MistakesCredit Mistakes• Fair Credit Billing ActFair Credit Billing Act

– Notify creditor of error in writing within 60 Notify creditor of error in writing within 60 days.days.

– Send it to the correct address.Send it to the correct address.– They must respond within 30 days.They must respond within 30 days.– Credit card company has 90 days to resolve Credit card company has 90 days to resolve

the problem or tell you why they think the bill the problem or tell you why they think the bill is correct.is correct.

– Won’t affect your credit rating while in dispute.Won’t affect your credit rating while in dispute.– You can withhold payment on shoddy goods if You can withhold payment on shoddy goods if

you have paid for them with a credit card.you have paid for them with a credit card.

Complaints About Consumer Complaints About Consumer CreditCredit

• First try to solve the problem directly First try to solve the problem directly with the creditor.with the creditor.

• If that does not work there are more If that does not work there are more formal complaint procedures.formal complaint procedures.

• There are a variety of consumer There are a variety of consumer credit protection laws and federal credit protection laws and federal agencies who administer and assist agencies who administer and assist with complaint procedures.with complaint procedures.

Truth In Lending RightsTruth In Lending Rights

• The Truth in Lending Law requires The Truth in Lending Law requires creditors to provide you with creditors to provide you with accurate and complete credit costs accurate and complete credit costs and terms. (APR)and terms. (APR)

• Creditors must disclose credit terms Creditors must disclose credit terms and information…and information…– In a clear and conspicuous manner.In a clear and conspicuous manner.– In a form you can keep.In a form you can keep.

Fair Debt Collection Fair Debt Collection Practices ActPractices Act

• Collection agencies…Collection agencies…– Can’t be abusive or threaten.Can’t be abusive or threaten.– Can’t call you at work if you say not to.Can’t call you at work if you say not to.– Can’t tell boss and friends.Can’t tell boss and friends.– Can’t call you at odd hours.Can’t call you at odd hours.– Must follow set procedures.Must follow set procedures.– The act does not apply to creditors that The act does not apply to creditors that

try to collect the debt themselves.try to collect the debt themselves.

Protection under other Protection under other Consumer Credit LawsConsumer Credit Laws

• Consumer Leasing ActConsumer Leasing Act

• Equal Credit opportunity ActEqual Credit opportunity Act

• Fair Credit Billing ActFair Credit Billing Act

• Fair Credit Reporting ActFair Credit Reporting Act

• Consumer Credit Reporting Reform Consumer Credit Reporting Reform ActAct

Identify TheftIdentify Theft

• Protect yourself by shredding old Protect yourself by shredding old credit slips, account statements, and credit slips, account statements, and credit offers you receive in the mail.credit offers you receive in the mail.

• You may not know your identity has You may not know your identity has been stolen until you receive a bill been stolen until you receive a bill with charges that are not yours.with charges that are not yours.

Identity TheftIdentity Theft

• Take three actions once you know:Take three actions once you know:– Contact the fraud departments of each Contact the fraud departments of each

of the major credit bureaus.of the major credit bureaus.– Contact the creditors for any accounts Contact the creditors for any accounts

that have been tampered with or that have been tampered with or opened illegally.opened illegally.

– File a police report.File a police report.

Question & Answer SessionQuestion & Answer Session